HR Update 2019: Navigating the different types of contracts

1. HR Update 2019: Navigating the different types of contracts

2. Agenda • Contracts: recent changes • The different types of working arrangements • Hiring an independent contractor? What you need to know • Q&A

3. Contracts: recent changes

4. What is a contract? • A legally binding agreement between an employer and an employee where the employee agrees to provide their skills and labour in exchange for remuneration from the employer. • For the contract of employment to take effect there must be the following: • Offer from the employer • Acceptance from the new employee • Agreement between both parties

5. What legislation governs contracts of employment • Employment (Miscellaneous) Provisions Act 2018 • Recent change - enacted in March 2019 • Terms of Employment (Information) Acts 1994 to 2014 • Employees must receive a written statement of terms and conditions of employment within two months of commencing employment

6. What legislation governs contracts of employment – cont. • Payment of Wages Act 1991 • Employees must receive a written statement of their remuneration as well as deductions • Unfair Dismissals Acts 1977 to 2015 • Employees must receive a written copy of the disciplinary procedures within one month of commencing employment

7. The Employment (Miscellaneous) Provisions Act

8. The Day5 statement Employers must now give new employees a written statement detailing the 5 core terms of employment within 5 days of the new employee commencing employment. This applies even if the employee resigns before day 5 of their employment.

9. The 5 core terms of employment Full name of the employer and employee Address or principal place of business of the employer For temporary contracts (fixed term / specified purpose), the expected duration / expiry date The rate or method of calculation of the employee’s pay (e.g.: weekly/ monthly) Number of hours which the employer reasonably expects the employee to work per normal working day and per normal working week

10. Full name of employee _______________ Full name of employer _______________ Address of employer _______________ If temporary contract (expected duration/ expiry date) _______________ e) Rate of remuneration _______________ Minimum wage pay ref period (weekly/ monthly) _______________ g) Hours of work (incl. overtime) per normal working day _______________ per normal working week _______________ SampleDay 5 statement

11. Consequences of not providing the core terms An employee can take a case to the WRC and be awarded up to 4 week’s pay Employees protected against penalisation A fixed payment notice up to €1,500 from WRC inspector Class A fine of €5,000 and/or custodial sentence of up to 12 months in prison

12. 4 ways to meet your contractual obligations Have a template contract of employment ready On day 1 issue new employees with a contract of employment even if it is a temporary or casual working arrangement Issue contracts of employment to all employees who do not have one currently Ensure that all new and existing contracts of employment clearly state the expected hours of work per day and per week where feasible

13. Banded hours The Organisation of Working Time Act 1997 was amended to introduce banded hours. In the case where an employee regularly works more hours each week than is written in their contract of employment, subject to various conditions, they can request to be placed on a band of weekly working hours that reflects the actuality of their working time. This is aimed at employees who work variable hours on a part time or casual basis.

14. Band of weekly working hours

15. Managing banded hour requests An employee has the right to request to be placed on a band of hours if: They have 12 months or more continuous service They habitually work more hours per week than is stated in their contract. The request must be made in writing. Employers have four weeks to consider the request. The reference period to calculate the banded hours is based on the previous 12 months of their employment

16. Reasons to refuse banded hours request Employers can refuse banded hour requests based on the following reasons : No evidence to support their claim to the hours they worked during the 12 month reference period Where exceptional, unusual or unforeseeable circumstances arise There was a significant adverse change impacting the business during or after the 12 month reference period The average hours worked during the 12 month reference period was due to a temporary situation that no longer exists

17. Disputes on banded hours If an employee believes their employer has failed to place them in a band of hours, they can make a complaint to the Workplace Relations Commission. The adjudicator will hear the case and decide whether the complaint is founded or not found in the employee’s favour. The employer will not be expected to pay compensation if they fail to comply with the banded hour request. They will be required to place the employee on the required band of hours. Employees are protected against penalisation.

18. Zero hour contracts Employers will no longer be able to use zero hour working arrangements except for: Work done in emergency circumstances Short term relief work to cover routine absences – Section 18 (3)

19. Minimum payments for zero hour arrangements Where an employee is required to be available for work in a particular week and they are either not called into work or are sent home early, the employer must pay them either: A minimum payment of 3 times the national minimum wage or the minimum rate set out in a ERO or SEO This applies to each occasion this arises

20. Alternative arrangements to zero hours If and when contracts – the new act does not apply to these contracts On call arrangements In certain circumstance lay off may be an option

21. The different types of working arrangements

22. The rise of flexibility in the workplace • The 9 to 5, Monday to Friday model is changing due to: • Customer needs • Technology • Globalisation • Employee needs

23. Different types of working arrangements

24. The different types of employees • Term time • Shift workers • Job sharers • Temporary agency workers • Full time • Part time • Casual • Flexitime

25. Permanent working arrangements • This is where the employee is hired on a permanent basis on a standard contract. • The types of employees can be full time, part time or avail of flexible working options. • The working week may be fixed or variable or the employee may be on-call or work in shift cycles.

26. A note on part time employees • Part time employees are protected by the Protection of Employees (Part-time Work) Act 2001. This means that part time employees cannot be treated less favourable in terms of pay and conditions of employment than a comparable full time employee unless such treatment can be justified on objective grounds. • Conditions of employment are given on a pro-rata basis, for example annual leave and public holiday entitlements. • Requests from employees to move from full time to part time should be considered but there is not statutory entitlement to part-time work.

27. Temporary working arrangements This is where an employee who is either full-time or part-time is hired on a temporary basis using one of the following options: Fixed term contract Specified purpose contract Temporary agency workers

28. Fixed term contracts • The employee is hired on a temporary basis for a specific period of time, e.g.: hired for three months to cover absences during the summer months. • The fixed term contract must include the start and end date of employment. • Fixed term employees are protected by the Protection of Employees (Fixed-Term Work) Act 2003. This means that fixed term employees must not be treated less favourably than comparable permanent employees in terms of pay and conditions of employment. • It limits the use of successive fixed term contracts.

29. Specified purpose contracts • The employee is hired on a temporary basis for a specific project or event, e.g.: hired to cover a long term absence where the return to work date is unknown. • The specified purpose contract must state the purpose of the contract and that it will end once the specified work is completed. • Specified purpose employees are protected by the Protection of Employees (Fixed-Term Work) Act 2003. This means that specified purpose employees must not be treated less favourably than comparable permanent employees in terms of pay and conditions of employment. • It limits the specified purpose employee to the purpose detailed in the contract.

30. Temporary agency workers • This is where an individual is employed by an employment agency to work on a client premises for a period of time. The individual has a contract of employment with the employment agency and they pay their wages. • Temporary agency workers are protected by the Protection of Employees (Temporary Agency Work) Act 2012. This means that temporary agency workers have the right to the same basic working and employment conditions if recruited directly by hirer to do same/similar work. • Right to equal access to collective facilities as direct recruits. • Right to receive same employment opportunity to job adverts as direct recruits.

31. Casual working arrangements • This is where the employee is hired on a casual basis on an “if and when” contract. • There is no mutuality of obligation. Hours of work can be refused or accepted by the employee and the employer does not guarantee hours of work. • The working arrangement could be ad-hoc hours to cover absences or busy periods or seasonal work. • Casual employees retain full employment rights and entitlements under the various pieces of legislation.

32. Hiring an independent contractor? What you need to know

33. Contracting, the alternative option? • Independent contractors • Gig workers • Freelancers • All self-employed? Sometimes yes, sometimes no.

34. What is an independent contractor? An independent contractor is an individual who is hired on a contract for service. They are self-employed and are responsible for their tax self-assessment. They are not protected by employment law legislation. Increasing focus from revenue, case law and policy makers on the employment status of independent contractors.

35. How to determine the status of an independent contractor?

36. Courts Approach to Employment Status • Over the years the Courts have been asked to establish which type of contract a person has and the following tests have been developed: • Control Test – This looks at the level of control the employer exercises in how the employee carries out the work. • Integration Test – This looks at whether the worker is part of the business and if the work is integral to it or is it an additional element to the business.

37. Courts Approach to Employment Status – cont. • Entrepreneurial Test – This looks at whether the individual uses their own assets, the degree of financial risk they take, the opportunity for profit and whether they can delegate work to another person. • Mixed Test – This uses all the elements of the previous tests and looks at the actuality of the working arrangement.

38. Some case law on independent contractors • Henry Denny & Sons Ltd vs The Minister for Social Welfare (1998) • Football Association of Ireland v Hand (2014) • Uber Case • Key takeaway: • Third party institutions will examine the day to day working relationship of both parties regardless of what is written or verbally agreed in the independent contractor’s agreement.

39. SFA HR and employment law advisory service Do you want to discuss your HR issues in more detail? Contact Helen Quinn for further advice on: T: 01 605 1668 E: helen.quinn@sfa.ie W: www.sfa.ie/advice

40. Questions and thank you